Vivendi board meets Oct.14, may discuss NBCU-source

By IBT Staff Reporter On 10/07/09 AT 7:22 AM

Vivendi (VIV.PA) is likely to sell its 20 percent stake in media company NBC Universal (NBCU) and may discuss the matter at a board meeting on Oct. 14, a source close to the situation told Reuters on Wednesday.

Speculation has risen that Vivendi will sell its stake after sources told Reuters last week that General Electric (GE.N), which owns 80 percent of NBCU, is in discussions to sell Comcast Corp (CMCSA.O) 51 percent in NBCU, a deal that would require Vivendi to agree to sell its stake.

The agenda of the board meeting is the GVT (GVTT3.SA) deal. They may discuss it (NBCU) but it's not the focus of the meeting, the source said.

The most likely scenario is that Vivendi will exit NBCU, but valuation is a real issue and a decision will not come before mid-November.

In September, Vivendi announced plans to buy Brazilian telecom group GVT (GVTT3.SA) for $2.9 billion.

There had been speculation that Vivendi could hold a board meeting next week to approve the GVT purchase ahead of the Oct. 16 deadline to complete due diligence for the deal.

Vivendi spokesman Antoine Lefort declined to comment on these issues and so far the company has been silent on what it will do with its stake this year.

Under a 2004 pact, Vivendi, Europe's largest entertainment group, has an annual window from mid-November to early December to exercise a put option on its stake in NBCU, which owns a television network, cables channels like USA and CNBC, a movie studio, theme parks and local TV stations.

The situation unleashes a media frenzy each autumn over what Vivendi will do with its stake.

Analysts said that the sale of the NBCU stake would allow Vivendi to continue to expand in emerging countries and buy out minorities in Canal Plus France, its pay-TV business. Unlike NBCU, Canal Plus is viewed as a key business for Vivendi.

Vivendi shares fell on Tuesday after Exane BNP Paribas said the sale of the NBCU stake was likely but would be at a lower price than expected. It estimated Vivendi could raise 3 billion euros ($4.4 billion) with the disposal.

Based on press reports, it is clear that Comcast's talks with GE could accelerate Vivendi's disposal of its 20 percent stake in NBCU, the brokerage said in a note.

But given the lack of other bidders, the difficult operating trends and low peer valuations, the deal is likely to be done at well below bullish price tags of $30-35 billion and closer to our $24 billion, it said.

UBS said in a Wednesday research note it valued Vivendi's stake in NBCU at 3 billion euros.

We believe the market now expects Vivendi to sell this year and if a deal is not ultimately reached, this could be taken negatively, it said.

By 1024 GMT, Vivendi shares were up 0.62 percent at 21.09 euros, in line with the European media stocks index .SXMP ($1=.6802 Euro)